August 13th, 2009 11:12 AM by Lehel Szucs
The housing market may be nearing a bottom, but foreclosures continue to mount in California and L.A. County, according to numbers released Wednesday by a real estate tracking firm.
One out of every 150 homes received a foreclosure notice in L.A. County in July, according to RealtyTrac Inc. Bank-owned properties and homes that received notices of default made up much of the 22,540 properties that received some kind of filing in July, according to the report. That was a 70 percent increase from last July, and a 5 percent increase from June.
A glut of foreclosures on the market tends to keep home prices down as banks try to sell them, and "underwater" homeowners look to sell their homes quickly.
"There's unfortunately a lot pain to go in the realm of foreclosures before we're done with the foreclosure problem," said Daren Blomquist, RealtyTrac's marketing and communications manager.
Economists agree with that assessment.
While there's consensus the market may be bottoming out, high unemployment and the remaining glut of foreclosed-upon homes held up in moratoriums mean the market has not yet hit that bottom.
"Foreclosures have flattened out, but 60-to-90-day defaults have gone off the charts," said Brad Kemp, director of regional research for Beacon Economics. "There's a huge inventory of homes that still need to be foreclosed on...There's still a lot of bad assets out there."
That's because the kind of
Loan modification programs designed to keep these buyers in their homes are working in only a few cases in the local area, said Tom Adams, a Monrovia Realtor.
Indeed. About 70 percent of all home modifications are delinquent after about six months, said Chris Vigil, a Whittier Realtor.
Realtors from Monrovia to Whittier say that roughly 50 percent of their sales recently are in foreclosed homes.
And while economists have seen signs of an improving economy, the number of foreclosures is still among the more foreboding signs, along with billions of bad assets still on banks' books.
On the flip side, demand for foreclosed homes is way up, prompting multiple bids on a dwindling supply of properties, Vigil said.
That has forced prices back up after the past year's crash. A new wave of foreclosures on the market will dampen that upward trend, but likely won't push it down as far because between rising demand for homes and foreclosure moratoria, the market will not be overwhelmed with bank-owned homes, Blomquist said.
Still, the market has another year to 18 months before it sheds thousands of delinquent loans and properties, Vigil said.
Until then, "prices may have a little further to fall, unfortunately," Blomquist said. "But we haven't hit the bottom yet."
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